According to a Wall Street Journalreport tonight, "[t]he online-video service has been at odds with Verizon Communications Inc. and other broadband providers for months over how much Netflix streaming content they will carry without being paid additional fees. Now the long simmering conflict has heated up and is slowing Netflix, in particular, on Verizon's fiber-optic FiOS service, where Netflix says its average prime-time speeds dropped by 14 percent last month."

Further Reading

One possible interpretation of the above statement is that Verizon has been demanding direct payments from Netflix in exchange for carrying any video traffic beyond some numerical limit. That's probably not precisely what's happening, however, because the report says this particular dispute has been simmering for months—meaning it started before the court decision last month that overturned the Federal Communications Commission's net neutrality rules. Prior to that court decision, it would not have been legal for Verizon to refuse to carry Netflix traffic when its payment demands weren't met.

However, there are other ways Verizon can play hardball and affect Netflix performance. Netflix has been pushing ISPs to host its caching equipment within their data centers and to peer directly with the video provider—that is, exchange traffic without a third-party intermediary.

"Netflix wants broadband companies to hook up to its new video-distribution network without paying them fees for carrying its traffic," the Journal noted. "But the biggest US providers—Verizon, Comcast, Time Warner Cable, and AT&T Inc.—have resisted, insisting on compensation."

ISPs are under no obligation to accept Netflix's peering and caching offers. Teaming up with Netflix might improve performance for consumers, but not doing so isn't the same as refusing to carry traffic. If Verizon's network and its interconnections with third-party networks are strong, Netflix quality should be reasonably good.

The biggest problem is probably the same one we've seen in previous disputes: the connections between ISPs and the Internet bandwidth providers that Netflix pays to distribute its traffic to the rest of the Internet.

As we've reported before, those bandwidth providers, such as Cogent Communications, have traditionally exchanged traffic with consumer ISPs without money changing hands. But ISPs are using increases in Netflix traffic as justification to demand payment.

When negotiations stall, Verizon could put pressure on Cogent by delaying equipment upgrades needed to add capacity to links that have become congested. Cogent accused Verizon of doing just that last June, and it seems it may be happening again.

"People familiar with Cogent's and Netflix's thinking say the cable and telephone companies are delaying upgrading existing connections," the Journal reported. "Executives at major broadband providers, meanwhile, privately blame the traffic jam on Netflix's refusal to distribute its traffic more efficiently. ... Neither side is budging, people familiar with the matter said, leading to growing congestion."

The report noted that "Verizon has a policy of requiring payments from networks that dump more data into its pipes than they carry in return. 'When one party's getting all the benefit and the other's carrying all the cost, issues will arise,' said Craig Silliman, Verizon's head of public policy and government affairs."

Netflix traffic being sent from Cogent to consumer ISPs has reportedly increased in the months since Netflix started offering its so-called "Super HD" streams to all customers, rather than just customers of ISPs who have partnered with Netflix.

"Within the past four to six months, Netflix traffic through Cogent's connections to one major broadband provider has at least quadrupled, one person familiar with the matter said," the Journal reported.

Netflix declined to comment on financial disputes with Verizon.

Cogent told Ars that "this is a continuation of the same dispute" that we wrote about last June. A Verizon spokesperson called this latest news a "replay of the longstanding issue you guys covered a while back."

I can see both sides of this argument. The whole reason they're called "peering agreements" is because both sides are supposed to be peers, as in roughly equal. That means they're sending and receiving a roughly equal amount of traffic. That's obviously not the case here. On the flip side, ISPs need to make sure their customers are getting what they're paying for.

It's going to be tough for a while, and the only way I can see this getting resolved is Netflix paying up and passing the costs on to their subscribers. Net Neutrality doesn't enter the equation here.

No, no, no, no, no!

That argument had meaning only when the internet was young and business/academic based, not in the internet of the past ten years.

There _is_ balance. Verizon has ZERO content to offer to the rest of the internet, and the rest of the internet has everything that is desired by the Verizon customers. The balance is not one of byte-per-byte but one of supply-and-demand.

For months now, I've been hammered with ads urging me to upgrade to FiOS Quantum. The only temping reason is of course, Netflix. It's a $10 upgrade.

However if Netflix were to say, partner with a VPN/proxy provider for a bulk rate of VPNs and add it to my account, like disc service is, for a much more affordable $2/mo then Verison loses a bargaining chip, I get the performance I want at a much more reasonable price and at a better moral aesthetic because I am not paying Verizon for something I already am paying them for.

It would be much cheaper for Netflix to just buy the interconnects. VPNs are a hack that work for individuals because they take your traffic "out of the pack", but they don't really address the fundamental problems on a large scale. If Netflix is having issues because they're pushing 100GBit of traffic, that's not going to go away by hiding it behind a VPN and pushing 100GBit of traffic down a VPN.

"Verizon has a policy of requiring payments from networks that dump more data into its pipes than they carry in return"

Dear Verizon,

I have noticed that your service is dumping much more data into my Netflix-using home network than you are carrying in return. Since you support a policy that requires payment from networks that exhibit this behavior, I fully expect you will be sending a check to every one of the home networks that exhibit this asymmetric data profile.

You understand the difference between the user agreements that customers have and the peer agreements between providers, right?

I have asked before and no one knows, but is there a tool a person can run themselves to see how fast their netflix stream is?

Not that I know of. Netflix has a tool that shows the average per ISP, but I don't think that's what you're looking for.

I have seen that, but I was hoping for a more personal tool so I could test with and without a VPN, see if there is a difference. I haven't noticed any issues with quality, so I would love to see what the real numbers are.

Use a poor man's test suite.

Disable everything generating net traffic except for NetFlix then use Task Manager or Network Connections to monitor the traffic. Note the peaks and averages.

Fire up the VPN and repeat the experiment.

Repeat the process multiple times over about a week and see if there is a pattern

If reported network traffic is consistently lower with the VPN disabled, then it is affecting throttling somewhere in the internet. Not necessarily Verizon or Comcast, but you are routing around a bottleneck.

For months now, I've been hammered with ads urging me to upgrade to FiOS Quantum. The only temping reason is of course, Netflix. It's a $10 upgrade.

However if Netflix were to say, partner with a VPN/proxy provider for a bulk rate of VPNs and add it to my account, like disc service is, for a much more affordable $2/mo then Verison loses a bargaining chip, I get the performance I want at a much more reasonable price and at a better moral aesthetic because I am not paying Verizon for something I already am paying them for.

It would be much cheaper for Netflix to just buy the interconnects. VPNs are a hack that work for individuals because they take your traffic "out of the pack", but they don't really address the fundamental problems on a large scale. If Netflix is having issues because they're pushing 100GBit of traffic, that's not going to go away by hiding it behind a VPN and pushing 100GBit of traffic down a VPN.

What will never go away is the incentive for ISP to slow down Netflix traffic to prod end-users to their offerings.

I have asked before and no one knows, but is there a tool a person can run themselves to see how fast their netflix stream is?

Not that I know of. Netflix has a tool that shows the average per ISP, but I don't think that's what you're looking for.

I have seen that, but I was hoping for a more personal tool so I could test with and without a VPN, see if there is a difference. I haven't noticed any issues with quality, so I would love to see what the real numbers are.

Use a poor man's test suite.

Disable everything generating net traffic except for NetFlix then use Task Manager or Network Connections to monitor the traffic. Note the peaks and averages.

Fire up the VPN and repeat the experiment.

Repeat the process multiple times over about a week and see if there is a pattern

If reported network traffic is consistently lower with the VPN disabled, then it is affecting throttling somewhere in the internet. Not necessarily Verizon or Comcast, but you are routing around a bottleneck.

Hm...that isn't a bad workaround. As long as Netflix is the only thing using the network it would be pretty close. I will try this tonight. Thank you!

I have asked before and no one knows, but is there a tool a person can run themselves to see how fast their netflix stream is?

Not that I know of. Netflix has a tool that shows the average per ISP, but I don't think that's what you're looking for.

I have seen that, but I was hoping for a more personal tool so I could test with and without a VPN, see if there is a difference. I haven't noticed any issues with quality, so I would love to see what the real numbers are.

Use a poor man's test suite.

Disable everything generating net traffic except for NetFlix then use Task Manager or Network Connections to monitor the traffic. Note the peaks and averages.

Fire up the VPN and repeat the experiment.

Repeat the process multiple times over about a week and see if there is a pattern

If reported network traffic is consistently lower with the VPN disabled, then it is affecting throttling somewhere in the internet. Not necessarily Verizon or Comcast, but you are routing around a bottleneck.

Hm...that isn't a bad workaround. As long as Netflix is the only thing using the network it would be pretty close. I will try this tonight. Thank you!

What you seek though is what is needed to demonstrate ISP misbehaviour. Wheeler talks about transparency from ISP but I don't even really know what sort of data ISP's can be compelled to give to prove or disprove anything.

I have asked before and no one knows, but is there a tool a person can run themselves to see how fast their netflix stream is?

Not that I know of. Netflix has a tool that shows the average per ISP, but I don't think that's what you're looking for.

I have seen that, but I was hoping for a more personal tool so I could test with and without a VPN, see if there is a difference. I haven't noticed any issues with quality, so I would love to see what the real numbers are.

Use a poor man's test suite.

Disable everything generating net traffic except for NetFlix then use Task Manager or Network Connections to monitor the traffic. Note the peaks and averages.

Fire up the VPN and repeat the experiment.

Repeat the process multiple times over about a week and see if there is a pattern

If reported network traffic is consistently lower with the VPN disabled, then it is affecting throttling somewhere in the internet. Not necessarily Verizon or Comcast, but you are routing around a bottleneck.

Hm...that isn't a bad workaround. As long as Netflix is the only thing using the network it would be pretty close. I will try this tonight. Thank you!

What you seek though is what is needed to demonstrate ISP misbehaviour. Wheeler talks about transparency from ISP but I don't even really know what sort on data ISP's can be compelled to give to prove or disprove anything.

Actually no, I am just curious as to if there is a difference. I haven't noticed any issues, so I'm curious as to if it is just me not noticing or if there really isn't much difference.

If I wanted to prove the ISP was doing something I would definitely need a lot more information, much more than I could ever get from just my home computer. There are so many different pieces at work I can't imagine any amount of purely local data could ever tell me, without question, what was happening.

So let me get this straight. Verizon is already charging the consumer for everything that goes through Verizon's network to that consumer. But, that's not enough. Now they also want to charge to provider of the content that the consumer has already paid for. Why am I not surprised??? Everyone complains about government regulation, but it is this type of unethical behavior that leads to it. Not that government regulation is the answer, but stuff like this usually leads to it.

So let me get this straight. Verizon is already charging the consumer for everything that goes through Verizon's network to that consumer. But, that's not enough. Now they also want to charge to provider of the content that the consumer has already paid for. Why am I not surprised??? Everyone complains about government regulation, but it is this type of unethical behavior that leads to it. Not that government regulation is the answer, but stuff like this usually leads to it.

Not necessarily. The quote doesn't say fees from Netflix, just that they want more money in fees.

Quote:

According to a Wall Street Journal report tonight, "[t]he online-video service has been at odds with Verizon Communications Inc. and other broadband providers for months over how much Netflix streaming content they will carry without being paid additional fees. Now the long simmering conflict has heated up and is slowing Netflix, in particular, on Verizon's fiber-optic FiOS service, where Netflix says its average prime-time speeds dropped by 14 percent last month."

Reading the rest of the article and some other information, it seems more likely that they want extra fees from Cognet, who Netflix uses as their ISP, as the peering agreement they have has gone lopsided. Essentially, different providers generally have about the same data coming and going from each other, so they just agree to let it go. Currently, however, Cognet is sending much more data through Verizon, so they are no longer balanced, hence their desire for extra fees.

The only way things are going to dramatically improve is if we were to nationalise the infrastructure, open it up to everyone and make the companies compete on service.

(ie never)

Perhaps, but once you let the government in the door, they never leave (ie., income tax, social security, medicaid, welfare, obamacare, etc.), and it is accompanied by many nasty consequences. It's very much the, "While you live in my house, you will observe my rules." scenario.

Either with government involvement or with free markets, I don't see a good outcome.

For months now, I've been hammered with ads urging me to upgrade to FiOS Quantum. The only temping reason is of course, Netflix. It's a $10 upgrade.

However if Netflix were to say, partner with a VPN/proxy provider for a bulk rate of VPNs and add it to my account, like disc service is, for a much more affordable $2/mo then Verison loses a bargaining chip, I get the performance I want at a much more reasonable price and at a better moral aesthetic because I am not paying Verizon for something I already am paying them for.

It would be much cheaper for Netflix to just buy the interconnects. VPNs are a hack that work for individuals because they take your traffic "out of the pack", but they don't really address the fundamental problems on a large scale. If Netflix is having issues because they're pushing 100GBit of traffic, that's not going to go away by hiding it behind a VPN and pushing 100GBit of traffic down a VPN.

What will never go away is the incentive for ISP to slow down Netflix traffic to prod end-users to their offerings.

Nah, it's not really as substantial of a threat as most internet geeks think. Netflix is far more of a threat to HBO than they are to Verizon or TimeWarner Cable. The distribution networks are going to get paid no matter what. "Cord cutting" is a real thing, but it's not that big (customer loss in the traditional pay-TV segment attributable to cord cutting is around 1% a year and slowing -- not bad for an industry with 90% penetration). Most people tend to have cable TV AND Netflix (the users of Ars may be slightly biased towards cord cutting.)

Guess what Verizon? It's Netflix that gives me any reason to continue paying for an ISP. I'm currently on a 50down Verizon connection and because of my inability to use Netflix at just about any time of day (oh, it's fine, great even, from 2AM-5AM) when I move I'm going to be looking to see if there are any small time ISPs. Or at least anything other than you available. I know FIOS is available where I'm looking to move to and I don't want it.

Pull your head out and realize that it's these high bandwidth services that make us, your paying customers, want high-speed internet in our home. If it wasn't for these services most of us would probably make do fairly well with mobile connection (and the occasional tether) only.

Agreed. These services drive the market. Without these companies, I wouldn't have much of a reason to have the internet and I certainly wouldn't be paying for a higher tier. My daughter and I watch Netflix, we play online games, we use Steam to download games. The ISP's are wanting to essentially charge both ways. Charge us to get to the content and charge the provider for sending us the content. Those providers are paying some ISP somewhere for their offices, servers and so on? If this happens, then where does it stop?

ISP: "Oh, there's too many people watching YouTube and Hulu. We need to start changing them. Steam, wow, those games are large, better charge them as well. Oh and look at all the people on Facebook. Man, better charge them too. This is absolute crap on the ISP's part. We are the ones who will suffer in the end.

The only way things are going to dramatically improve is if we were to nationalise the infrastructure, open it up to everyone and make the companies compete on service.

(ie never)

Perhaps, but once you let the government in the door, they never leave (ie., income tax, social security, medicaid, welfare, obamacare, etc.), and it is accompanied by many nasty consequences. It's very much the, "While you live in my house, you will observe my rules." scenario.

Either with government involvement or with free markets, I don't see a good outcome.

Yeah; I used to think that nationalization would be a good idea... but the incentives aren't there for the government to keep the network upgraded. We'd all end up paying for it out of tax dollars anyway, only it wouldn't be nearly as efficient. Better to put in place regulations that shape the market in the way we want it to go. The market sets the price; not the other way around. If you thought it was too expensive, you'd put your money where your mouth is and just stop paying for it...

Municipal broadband is fine as long as it has to compete with market solutions.

So let me get this straight. Verizon is already charging the consumer for everything that goes through Verizon's network to that consumer. But, that's not enough. Now they also want to charge to provider of the content that the consumer has already paid for. Why am I not surprised??? Everyone complains about government regulation, but it is this type of unethical behavior that leads to it. Not that government regulation is the answer, but stuff like this usually leads to it.

Not necessarily. The quote doesn't say fees from Netflix, just that they want more money in fees.

Quote:

According to a Wall Street Journal report tonight, "[t]he online-video service has been at odds with Verizon Communications Inc. and other broadband providers for months over how much Netflix streaming content they will carry without being paid additional fees. Now the long simmering conflict has heated up and is slowing Netflix, in particular, on Verizon's fiber-optic FiOS service, where Netflix says its average prime-time speeds dropped by 14 percent last month."

Reading the rest of the article and some other information, it seems more likely that they want extra fees from Cognet, who Netflix uses as their ISP, as the peering agreement they have has gone lopsided. Essentially, different providers generally have about the same data coming and going from each other, so they just agree to let it go. Currently, however, Cognet is sending much more data through Verizon, so they are no longer balanced, hence their desire for extra fees.

Point is the same; they want to be paid twice for the data, regardless who they are trying to get the payment from.

What will never go away is the incentive for ISP to slow down Netflix traffic to prod end-users to their offerings.

Nah, it's not really as substantial of a threat as most internet geeks think. Netflix is far more of a threat to HBO than they are to Verizon or TimeWarner Cable. The distribution networks are going to get paid no matter what. "Cord cutting" is a real thing, but it's not that big (customer loss in the traditional pay-TV segment attributable to cord cutting is around 1% a year and slowing -- not bad for an industry with 90% penetration). Most people tend to have cable TV AND Netflix (the users of Ars may be slightly biased towards cord cutting.)

Any ISP can also become content producers like HBO. Wheeler's recent position make it legal for such an ISP to say, "if you want content we don't have, switch to an ISP that does".

Problem with the not everyone is a customer of Netflix argument is that most likely it's the demand for Netflix is probably the reason most users have higher data download plans from Verizon, therefore Verizon is probably making more money from those users than non-Netflix users. So it's more likely that Netflix users support non-Netflix users than the other way around.

Whether Netflix should fork over some money to Verizon or vise versa is a question of bargaining position. If there's no content then there's no demand, if there's no capacity then it's difficult to deliver the content. I don't believe there's a correct or incorrect solution, just several solutions, each having it's own implications.

The question is do we as consumers wish to align ourselves with certain interests thru legislation or regulations since some ISPs have local monopolies. Or perhaps we should tolerate those local monopolies temporarily while expanding ISP options.

By regulation of the ISP you may create a higher barrier to entry to upstart ISP thereby perpetuating the local monopoly some ISPs have.

allenallen wrote:The problem I have with the ISP's argument is this: We're assuming that the price the ISP offers INCLUDES the cost they are paying to carry NetFlix.

As other have pointed out (thank you!) the only appeal for fast internet for most of us is quality, highly stable NetFlix. So, adjust your prices and stop whining or go suck a rock.

Unfortunately, as an ISP who has talked with Netflix about video bandwidth issues, I can say with authority that this story is not entirely accurate. Netflix is not pushing ISPs to cache; in fact, it violates Internet standards by refusing to let them cache. Rather, it wants the largest ISPs to host its massive, power-hungry, bandwidth-hungry video servers -- for free -- at their facilities. This saves Netflix millions in fees from content delivery networks such as Akamai, while it costs the ISPs space, power, and bandwidth. A pretty good deal for Netflix, eh? What's more, if the ISP refuses, Netflix performance suffers -- and when a Netflix customer calls to complain, Netflix blames it on the ISP. This can cost the ISP customers and runs up its tech support costs as customers call the ISP when Netflix is to blame.

Worse still, if the ISP is a small or competitive one like mine -- that is, not a Verizon or a Comcast -- it won't let them do anything at all to save bandwidth or accelerate performance. Netflix won't even let me build a big cache entirely on my own dime and cache their content. (Yes, they've told me so directly, after I have offered to foot the entire bill for terabytes of storage.) This harms broadband competition and deployment.

In short, Netflix truly is being a bandwidth hog and attempting to exert market power to pick winners and losers. It's the villain here -- not the ISPs. If Netflix does not conform to Internet standards and allow caching, ISPs should be allowed to penalize it for its colossal waste of bandwidth -- which also harms customers' experience -- by charging it for the wasted bandwidth.

Unfortunately, as an ISP who has talked with Netflix about video bandwidth issues, I can say with authority that this story is not entirely accurate. Netflix is not pushing ISPs to cache; in fact, it violates Internet standards by refusing to let them cache. Rather, it wants the largest ISPs to host its massive, power-hungry, bandwidth-hungry video servers -- for free -- at their facilities. This saves Netflix millions in fees from content delivery networks such as Akamai, while it costs the ISPs space, power, and bandwidth. A pretty good deal for Netflix, eh? What's more, if the ISP refuses, Netflix performance suffers -- and when a Netflix customer calls to complain, Netflix blames it on the ISP. This can cost the ISP customers and runs up its tech support costs as customers call the ISP when Netflix is to blame.

Worse still, if the ISP is a small or competitive one like mine -- that is, not a Verizon or a Comcast -- it won't let them do anything at all to save bandwidth or accelerate performance. Yes, they've told me so directly. This harms broadband competition and deployment.

In short, Netflix truly is being a bandwidth hog and attempting to exert market power to pick winners and losers. It's the villain here -- not the ISPs. If Netflix does not conform to Internet standards and allow caching, ISPs should be allowed to penalize it for its colossal waste of bandwidth -- which also harms customers' experience -- by charging it for the wasted bandwidth.

Considering the volume of netflix content, isn't caching just as costly (or close to it) as hosting their video servers? Wouldn't caching be in effect the same as hosting?

The ISP is obligated to reasonably deliver the contracted bandwidth to the end-user at the contract price. If the ISP is unable to deliver the contracted bandwidth, that is their problem. Verizon, etc could all be facing a major class-action lawsuit if they do not reasonably and consistently deliver the contracted bandwidth. I don't have Netflix or any similar service--but I do have a contracted broadband connection. If the material I want to obtain is on a slow server, that is something the ISP does not control. However, if the material to be delivered to me is delivered to my ISP at (or above) the contracted bandwidth I have with my ISP, I have a reasonable expectation for that material to be delivered to me by the ISP at about the contracted maximum rate. The ISP does not have a valid excuse to not deliver the material at the contracted rate no matter what they claim.

Caching, by its very nature, is much more efficient that hosting a server. The server must be stocked daily with every bit of new material a user might want, while the cache only holds something that at least one user has requested. So, in the worst case it imposes no overhead, and in the average case (because some videos are much more popular than others) it eliminates waste by preventing the same content from being transferred multiple times -- over the ISP's backbone links, its most expensive and critical resources. What's more, a cache can -- and usually does -- "buffer ahead," so that the content is delivered smoothly even if there's congestion on the backbone. This means less chance of a choppy or intermittent stream for the user.

This is why Internet standards have, for decades, specified that HTTP content (which is what the video is) be cacheable if possible. Netflix violates these standards, and does not care that it does because the cost falls on the ISP.

The ISP is obligated to reasonably deliver the contracted bandwidth to the end-user at the contract price. If the ISP is unable to deliver the contracted bandwidth, that is their problem. Verizon, etc could all be facing a major class-action lawsuit if they do not reasonably and consistently deliver the contracted bandwidth. I don't have Netflix or any similar service--but I do have a contracted broadband connection. If the material I want to obtain is on a slow server, that is something the ISP does not control. However, if the material to be delivered to me is delivered to my ISP at (or above) the contracted bandwidth I have with my ISP, I have a reasonable expectation for that material to be delivered to me by the ISP at about the contracted maximum rate. The ISP does not have a valid excuse to not deliver the material at the contracted rate no matter what they claim.

But the problem is link between your ISP and Netflix's ISP. Once it gets on Verizon's network, it's fast. But the problem is getting onto the network in the first place. This is Netflix's choice. They can use less clogged methods to get the data packets to Verizon, but they don't want to because it's slightly more expensive.

Verizon is under no obligation to peer with anyone. You can still send data over the transit network. Why isn't netflix doing it?

Again, it's not verizon who is choosing to use overloaded peering points, it's Netflix.

So let me get this straight. Verizon is already charging the consumer for everything that goes through Verizon's network to that consumer. But, that's not enough. Now they also want to charge to provider of the content that the consumer has already paid for. Why am I not surprised??? Everyone complains about government regulation, but it is this type of unethical behavior that leads to it. Not that government regulation is the answer, but stuff like this usually leads to it.

Not necessarily. The quote doesn't say fees from Netflix, just that they want more money in fees.

Quote:

According to a Wall Street Journal report tonight, "[t]he online-video service has been at odds with Verizon Communications Inc. and other broadband providers for months over how much Netflix streaming content they will carry without being paid additional fees. Now the long simmering conflict has heated up and is slowing Netflix, in particular, on Verizon's fiber-optic FiOS service, where Netflix says its average prime-time speeds dropped by 14 percent last month."

Reading the rest of the article and some other information, it seems more likely that they want extra fees from Cognet, who Netflix uses as their ISP, as the peering agreement they have has gone lopsided. Essentially, different providers generally have about the same data coming and going from each other, so they just agree to let it go. Currently, however, Cognet is sending much more data through Verizon, so they are no longer balanced, hence their desire for extra fees.

Point is the same; they want to be paid twice for the data, regardless who they are trying to get the payment from.

Well yes and no. They want to be paid by the enduser, obviously, and they also want compensation because their peering agreement is no longer equal, as it was designed for. It would be as if you paid for a 25/5 connection, but then started uploading at 10 as opposed to 5 (assuming they don't control it and go by the honor system in this case). They would want fees from you for the incremental increase, even though someone else, somewhere else, who is also paying for service, is receiving them.Essentially, both sides pay in the internet, unlike a more traditional medium such as paper mail.

That said, I was explaining the situation to you because you seemed to not fully understand it. It seems now that you more interested in raging as opposed to understanding the situation.

Caching, by its very nature, is much more efficient that hosting a server. The server must be stocked daily with every bit of new material a user might want, while the cache only holds something that at least one user has requested. And then, it prevents waste by preventing that content from being transferred multiple times -- over the ISP's backbone links, its most expensive and critical resources. What's more, a cache can -- and usually does -- "buffer ahead," so that the content is delivered smoothly even if there's congestion on the backbone. This means less chance of a choppy or intermittent stream for the user.

This is why Internet standards have, for decades, specified that HTTP content (which is what the video is) be cacheable if possible. Netflix violates these standards, and does not care that it does because the cost falls on the ISP.

I don't know if caching has DMCA implications. Still, though, you will need additional equipment to cope with the varied content choices of users, yes.

I don't know if caching has DMCA implications. Still, though, you will need additional equipment to cope with the varied content choices of users, yes.

There are no copyright implications because it's a cache -- transient storage. If there's any worry about someone getting a massive video collection by raiding the cache, all that's necessary is for Netflix to encrypt the video and then send each authorized viewer a key over a separate channel.

No cache is perfect, because the usual LRU ("least recently used") algorithm can't predict the future. (LRU is designed so that it would be perfect if time ran backward.) But locality of reference (in this case, popularity of certain videos) makes caches a darned good solution.

What needs to happen, IMHO, is that users need to bug Netflix to make its content cacheable by the ISP. Oh, and YouTube as well -- because YouTube videos tend to go "viral" and tremendous amounts of bandwidth can be saved by caching them.

So let me get this straight. Verizon is already charging the consumer for everything that goes through Verizon's network to that consumer. But, that's not enough. Now they also want to charge to provider of the content that the consumer has already paid for. Why am I not surprised??? Everyone complains about government regulation, but it is this type of unethical behavior that leads to it. Not that government regulation is the answer, but stuff like this usually leads to it.

Not necessarily. The quote doesn't say fees from Netflix, just that they want more money in fees.

Quote:

According to a Wall Street Journal report tonight, "[t]he online-video service has been at odds with Verizon Communications Inc. and other broadband providers for months over how much Netflix streaming content they will carry without being paid additional fees. Now the long simmering conflict has heated up and is slowing Netflix, in particular, on Verizon's fiber-optic FiOS service, where Netflix says its average prime-time speeds dropped by 14 percent last month."

Reading the rest of the article and some other information, it seems more likely that they want extra fees from Cognet, who Netflix uses as their ISP, as the peering agreement they have has gone lopsided. Essentially, different providers generally have about the same data coming and going from each other, so they just agree to let it go. Currently, however, Cognet is sending much more data through Verizon, so they are no longer balanced, hence their desire for extra fees.

Point is the same; they want to be paid twice for the data, regardless who they are trying to get the payment from.

Well yes and no. They want to be paid by the enduser, obviously, and they also want compensation because their peering agreement is no longer equal, as it was designed for. It would be as if you paid for a 25/5 connection, but then started uploading at 10 as opposed to 5 (assuming they don't control it and go by the honor system in this case). They would want fees from you for the incremental increase, even though someone else, somewhere else, who is also paying for service, is receiving them.Essentially, both sides pay in the internet, unlike a more traditional medium such as paper mail.

That said, I was explaining the situation to you because you seemed to not fully understand it. It seems now that you more interested in raging as opposed to understanding the situation.

A fair pairing agreement assuming things will be equal from both sides makes sense when we're talking about a low level ISP that connects different ISPs. That's not what we're talking about here. The "uneven" traffic is being requested by Verizon's customers. It is not being pushed or requested by Netflix/Cognet. Verizon is (or should be) charging their customers for this traffic.

I really don't understand this! If I'm using my internet connection within the constraints of the package that I've purchased, then surely the ISP has (or should have) factored my usage into their capacity planning model, and what I then do with my connection is my business. To then degrade my service, in these circumstances, smacks of extortion! The internet is supposedly open so why should ISP's get paid twice, for each end of the connection?

I pay for 150GB of downloads a month, and I can use that data however I like. Most ISPs have no incentive to slow or throttle their customers' traffic, because if customers stream more videos, they will use more data, and will consider moving to a higher-tier (and therefore more expensive) plan.

Conversely, if your customers have unlimited data quotas, then every bit they download is an additional cost with no upside for the ISP. Their ideal customer will be someone who pays their monthly fee, but doesn't actually download anything. It will be in the ISP's interest to make it more difficult for customers to actually use the connection they have paid for.

This is simply an inaccurate view of how networks work.

If I connect a 1GB/s cable between my house and your house (we'll call your house "the internet"), then that costs me some money. I had to pay for the router, and for laying the cable, and for power, and for a place to house it, and for some workers to maintain it.

If the people in my house saturate that line (use all of it), then the costs don't change. If they all stop using the line entierly, then the costs don't change. The "marginal cost" of use is effectively zero.

This is also the situation for electricity. With most power stations, it takes so much time and effort to ramp up and down generation, that the marginal cost of use for "off peak" energy is virtually zero. Peak generation capacity is realistically where the majority of costs lie.

The same goes for network capacity. Peak capacity is what matters. If the links are sitting idle, then there are minimal costs of use (although there are some data volume costs... unequal peering arrangements will sometimes include costs based on data volumes, such as "aggregated virtual circuit" costs).

Yet, when it comes to electricity pricing, people pay per kWh. It's a simple way of charging, to account for the fact that higher usage results in higher peak generation costs.

I really don't see anything wrong with ISPs choosing to do the same. There will always be a market for "unlimited" services. However, I can also see why the Australian model where data quotas are the norm also has some merit. That said, I do realise it's an unpopular opinion - which is why it is downvoted into oblivion.

So let me get this straight. Verizon is already charging the consumer for everything that goes through Verizon's network to that consumer. But, that's not enough. Now they also want to charge to provider of the content that the consumer has already paid for. Why am I not surprised??? Everyone complains about government regulation, but it is this type of unethical behavior that leads to it. Not that government regulation is the answer, but stuff like this usually leads to it.

Not necessarily. The quote doesn't say fees from Netflix, just that they want more money in fees.

Quote:

According to a Wall Street Journal report tonight, "[t]he online-video service has been at odds with Verizon Communications Inc. and other broadband providers for months over how much Netflix streaming content they will carry without being paid additional fees. Now the long simmering conflict has heated up and is slowing Netflix, in particular, on Verizon's fiber-optic FiOS service, where Netflix says its average prime-time speeds dropped by 14 percent last month."

Reading the rest of the article and some other information, it seems more likely that they want extra fees from Cognet, who Netflix uses as their ISP, as the peering agreement they have has gone lopsided. Essentially, different providers generally have about the same data coming and going from each other, so they just agree to let it go. Currently, however, Cognet is sending much more data through Verizon, so they are no longer balanced, hence their desire for extra fees.

Point is the same; they want to be paid twice for the data, regardless who they are trying to get the payment from.

Well yes and no. They want to be paid by the enduser, obviously, and they also want compensation because their peering agreement is no longer equal, as it was designed for. It would be as if you paid for a 25/5 connection, but then started uploading at 10 as opposed to 5 (assuming they don't control it and go by the honor system in this case). They would want fees from you for the incremental increase, even though someone else, somewhere else, who is also paying for service, is receiving them.Essentially, both sides pay in the internet, unlike a more traditional medium such as paper mail.

That said, I was explaining the situation to you because you seemed to not fully understand it. It seems now that you more interested in raging as opposed to understanding the situation.

A fair pairing agreement assuming things will be equal from both sides makes sense when we're talking about a low level ISP that connects different ISPs. That's not what we're talking about here. The "uneven" traffic is being requested by Verizon's customers. It is not being pushed or requested by Netflix/Cognet. Verizon is (or should be) charging their customers for this traffic.

That is a different argument. Right now the internet works a certain way, you are saying it should work a different way. Personally, I think data between ISPs should be worth a certain amount to make sure they are all compensated fairly between each other. For the most part it would all even out, but it wouldn't allow for uneven pairing to occur without those costs already being accounted for.You are suggesting that the person requesting it should pay. That would also work, but it would lead to much higher rates for people and would introduce all sorts of issues. Does each person pay for the specific data they request? Does the cost get absorbed by the entire group to make more unified speed tiers? Are you suggesting you only pay for speed and then have metered billing? This solution is completely different from the current structure.

The ISP is obligated to reasonably deliver the contracted bandwidth to the end-user at the contract price. If the ISP is unable to deliver the contracted bandwidth, that is their problem. Verizon, etc could all be facing a major class-action lawsuit if they do not reasonably and consistently deliver the contracted bandwidth. I don't have Netflix or any similar service--but I do have a contracted broadband connection. If the material I want to obtain is on a slow server, that is something the ISP does not control. However, if the material to be delivered to me is delivered to my ISP at (or above) the contracted bandwidth I have with my ISP, I have a reasonable expectation for that material to be delivered to me by the ISP at about the contracted maximum rate. The ISP does not have a valid excuse to not deliver the material at the contracted rate no matter what they claim.

But the problem is link between your ISP and Netflix's ISP. Once it gets on Verizon's network, it's fast. But the problem is getting onto the network in the first place. This is Netflix's choice. They can use less clogged methods to get the data packets to Verizon, but they don't want to because it's slightly more expensive.

Verizon is under no obligation to peer with anyone. You can still send data over the transit network. Why isn't netflix doing it?

Again, it's not verizon who is choosing to use overloaded peering points, it's Netflix.

If Netflix has the server capacity to deliver the full service that is contracted, then that means the problem is not with Netflix or its network. Networks have capacities. Netflix reasonably can deliver all the capacity requested of it by its customers--and that total deliverable capacity is less than what all the ISPs (and their customers) want to receive as data.

Verizon (and other ISPs) choosing to not cache data is a valid point--because it would resolve the alleged excess bandwidth issue about which Verizon (etc) is complaining. Sure, there are other costs involved--but that is a "feature" Verizon and the other big ISPs could use to promote "customer service" orientation while simultaneously fixing their bandwidth problems with Netflix. More importantly, if Netflix is actively managing that capacity, it is a low price to pay by Verizon (etc) to keep their customers happy (and keeping their subscriptions to the ISP due to good service).

Verizon (etc) does not have to peer with anyone, but then how will they deliver the services they promised in their contracts with their customers?

Other side of the argument... So, Why should Verizon spend billions building out this network just for netflix HD. Something has to give...the argument that "well i paid to get the internet... ok well someone has to pay. I doubt customers would be happy if their cost went way up right. So Verizon should spend all this money just for netflix gains. Why should netflix not have to pay if they are eating up all the bandwidth. Or should non-neflix users subsidize the netflix users. What if it doubles again and again... Plus Verizon has to pay for content just like netflix... so they should just say you win netflix, because you can provide your service on our dime and not build your own network. Hey why doesn't Netflix just build it's own network for prolly $100 billion. I just dont get it... Someone has to pay and Verizon should basically make themselves bankrupt for netflix sake? And someone said well what if we abandon Verizon... Do you really think the other carriers are not having this same issue? Basically yeah Netflix gets to double it's profits next year, and verizon should just eat the billions... Or even maybe you get billed on bandwidth usage, blah. O and apparently the courts understand, and I'm sure they looked at the subject more than any of us.

Here's a comment from someone...(I can only imagine how postal services would be like if they worked on Verizon's logic. FedEx and UPS arguing that anyone receiving goods should have to pay a subscription fee from them, and the senders should also pay them to deliver it.) --- Um if they were using their trucks maybe...

Here's another ...(You do realize that Verizon made $69,570,0000,000 in profit before interest/taxes last year. This is just an unjustified revenue grab. Verizon is already been paid for this delivery by all of the consumers paying for 50Mb/s download (me included). They also have enough cash in their checking account to buy Netflix and still have $30B left over.) --- Um no they made 11 billion and made very little the year before, paying so much to build out the network, and they have all that cash on hand to buy the other half of verizon wireless

You may not be aware of this, but UPS has a special discount offer for shippers. You give the package to UPS to be delivered and they hand it over to the USPS and let the Post Office handle the actual delivery.

The Post Office does not charge the receiver, the postage is paid by UPS and is included in the fees charged by UPS.

In the Verizon NetFlix case, the buyers pay a rate set by contract for guaranteed delivery.Verizon is receiving the shipment from NetFlixVerizon is under contract (written by Verizon even) to deliver that productThe VZ subscriber has prepaid the shipping costs to Verizon

Verizon has accepted the payment from their subscriber in accord with a contract that does not authorize extra fees payable to the source over and above the payment for the product.

Unless the Verizon contract (offered by VZ on a take it or leave basis) does not state that they will guarantee an adequate level of service in accordance with standard commercial law, then Verizon is in violation of their contractual obligations.

Here is the promise VZ makes as part of their service agreement with Broadband consumer internet

Quote:

If you buy broadband Internet access from Verizon Online• We will not prevent you or other users of our service from sending and receiving the lawful content of your choice; running lawful applications and using lawful services of your choice; or connecting your choice of legal devices that do not harm the network or the provision of Internet access service, facilitate theft of service, or harm other users of the service.• We will not unduly discriminate against any lawful Internet content, application, or service in a manner that causes meaningful harm to competition or to you or other users of our service.[/b]• We will continue to disclose accurate and relevant information in plain language about the characteristics and capabilities of our service offerings so you and other users of our service can make informed choices.• We will disclose the types of practices that we use to manage our network, consistent with standards to be developed by industry Technical Advisory Groups; we reserve the right not to disclose technical details that would undermine the efficacy of these practices.• We will continue to offer you an open Internet access service as described above, so that option will remain available to you even as we continue to innovate and create new services so that we may also offer you other online options to meet your needs. If and when we provide other online services, we will continue to disclose to you the characteristics, capabilities and terms of our various service offerings. That way you may distinguish between them as you choose whether, which and how many of our services you wish to use or purchase.

Notice that their promise implies that they will not deliberately degrade the performance of video service (2d promise)They also disclose that should they break the 2d promise they reserve the right to deny any such action if it would reveal business methods (3d promise)Finally they promise that they will not degrade service for their subscribers ... though we know now that they will break that promise if the content provider fails to ?voluntarily? provide bakshish.

I have asked before and no one knows, but is there a tool a person can run themselves to see how fast their netflix stream is?

Not that I know of. Netflix has a tool that shows the average per ISP, but I don't think that's what you're looking for.

I have seen that, but I was hoping for a more personal tool so I could test with and without a VPN, see if there is a difference. I haven't noticed any issues with quality, so I would love to see what the real numbers are.

When playing make sure the video isn't full Screen and press control - alt - shift- D you can try the same sort cut with P, S and C for different stats.

Verizon's end users have already paid for the packets. Either VZ wants to get paid a second time for the same traffic, or they want to drive up the cost of Netflix to make their preferred services look more attractive. Either way VZ can leverage their user base control to obtain monopoly profits. Expect to see more of this until the rewrite of the net neutrality rules.

1) Tier 2, sell to end users and small businesses2) Tier 1, sell to enterprise users and peer for free with other Tier 1s

Normally a customer facing ISP pays for their upstream connection then peers for free with other networks to reduce costs. They typically don't charge money for peering because the customer is already paying for that bandwidth. An ISP may charge some CDNs money because a CDN may want an SLA into another ISP's network because the CDN is selling a SLA to their own customers.

In this case, Verizon is both a Tier 1 and Tier 2. They charge their residential users money to access the Internet, but then Verizon turns around and claims that they're also a Tier 1 and also charges other networks to peer with them. They're double dipping, not to mention they charge a lot for low quality bandwidth. A Tier 1 should never have congestion as a normal thing.

This is a lot of like a single company owning both the toll roads to down town and a mall. They're in a position to abuse because they know the people can't go anywhere else.

Level 3 has a no-bullshit policy. If you're peering with them, then you links may not have congestion. If they do, then you lose your link. Only paying customers may have congested links and that's because they have to pay for their links. So either you're a paying customer and you can run you link however you want or you're a peer and you best no let you link get congested. If Level 3 sees a link over 50% utilization, they will tell you that you must upgrade. Level 3 will upgrade their end and you, your's. They don't leave links in a congested state and ask you to start paying for more speed.

Why does Level 3 do this? If someone is peering with them, they want nothing but the highest quality. Level 3 is a transit provider and is hell-bent to provide the best bandwidth to other networks. Verizon seems to be more like a drug dealer, wanting to give others a taste, but then charging money to remove the congestion. Verizon seems to treat free peering more like a gateway drug. Get them hooked, then bleed them dry.

The peering is precisely what makes the internet so valuable. Without the peering, or with establishing toll gates on the peering connections, the free flow that makes the Internet the internet falters or breaks down, becomes Balkanized, and all the opportunities the Internet inherently promotes are lost.

What Verizon is trying to do here is rather like turning the public road system back into a network of toll roads. We got rid of that backwards approach in the 19th Century (and it was the business community that led the charge) when Adam Smith pointed out how damaging that was and explained how it prevented opportunity and reduced wealth.

Netflix is a private company. They can carry -- or not -- whatever they want for whatever reasons, or for no reason whatsoever. None of that is censorship. For example, if Netflix tomorrow said, "We are no longer going to carry NC-17 films," that would not be censorship. Obviously, the do carry them now ("Irreversible," soon to get "Blue is the Warmest Color" for example). But there's nothing saying that they have to, otherwise they are censoring stuff.

Just like a lot of theatre chains (AMC, e.g.) won't carry NC-17 films. That's not censorship. It's a business and/or personal decision by AMC leadership.

NOW, if the GOVERNMENT said they weren't going to allow "Blue Is The Warmest Color" to be shown or distributed in this country, that WOULD be censorship.

If you look at the history of the Production Code (aka The Hays Code) for instance, you can see that it was version of "self-censorship" -- a step the studios took to *avoid* ACTUAL censorship by the government. By the time the Supreme Court ruled on the banning of "I Am Curious (Yellow)" in 1968 or 1969 -- can't remember right now -- the code was not only effectively dead, but actually dead. This is why we have a ratings system today ( a severely messed up system, but a ratings system nonetheless).

Netflix deciding not to carry "Duck Dynasty" (or ANY other title) is absolutely no different than ESPN deciding not to televise curling (or ANY other sport). It's completely up to them. And it is no way censorship.

Corporate greed is at an all time high, and will continue to get fatter and fatter until they bleed everything dry. This has the potential to be the next big market collapse. We live in a time of Corporatism, all the other political ideologies are long dead.

“People of the same trade seldom meet together, even for merriment and diversion, but the conversation sends in a conspiracy against the public, or in some contrivance to raise prices”